We believed that Adobe was threatened with death by AI. It turns out that it is one of the few companies that is making money from it

In the last year Adobe has lost almost half of its value. Twelve months ago it was trading at $382. Today your actions They are listed at $197.. Wall Street has clearly punished a company that certainly seemed to be threatened with death by new generative AI models. The surprise is that Adobe is not only not doing badly with AI, but it is doing really well.

Wall Street says one thing, the data another. In the second fiscal quarter of 2026, the company achieved some historical results with record revenues of $6.62 billion (up 13% year over year). Earnings per share (EPS) have shot up 18% to $5.96, and although the NASDAQ charts say otherwise, Adobe is not only not suffering, but appears to be stronger than ever.

A money making machine. Adobe is in fact behaving like a true software empire. In 2025, it managed to have free cash flow of $9.85 billion on revenue of $23.8 billion. Its operating margins are also the envy of the sector: they stand at 37% (47% in terms non-GAAP). Its subscription business is absolutely exceptional, with annual recurring revenue (ARR) already reaching $27.1 billion.

Others burn money with AI: ADobe earns it. While most companies do not stop investing money in the hope that the bet will pay off very profitable in the future, Adobe is ensuring that its generative AI tools are already having a positive impact on its results sheet. Income ARR Dependents on “AI First” solutions have tripled in just one year, and the big driver here is Firefly, Adobe’s generative AI platform. She alone has exceeded $250 million in ARR and continues to grow.

Companies trust Adobe. We users may love using Gemini or ChatGPT to create AI images, but companies that relied on Adobe products for their creative workflows continue to do so. 75% of Fortune 500 companies already use Firefly, but the company has also trained more than 2,500 custom AI models for large corporate accounts.

Users do not stop growing. Another advantage that AI has brought is that the technical barrier to using Photoshop or Premiere is lowered because the integrated AI assistants help users create what they wanted. There are also simplified tools like Adobe Express (70 million active users per month), and the freemium approach has been another reason for the number of users to grow: in just 12 months Adobe has gone from having 700 to 850 million users. The vast majority are still users of the free features, but Adobe it is enough to convert 2% to paying users to ensure that all these efforts are profitable.

But the competition is tight. Although things seem to be going very well, Adobe now faces a fragmented ecosystem with a lot of competition. These new rivals also take advantage of AI to “attack” very specific use cases. It happens with Canva, for examplewhich has become a real threat and already has a turnover of 4,000 million dollars. Midjourney, Runway and even the Spanish Magnific are platforms that have fully embraced the AI ​​revolution to offer services to both individuals and companies.

Be careful with subscriptions. Adobe is not immune to market fluctuations. The company stands out for maintaining extraordinary profitability in a very specialized niche, but it has taken questionable business decisions recently. The notable price increase of your subscriptions last year and its limits to generative credits have been decisions highly criticized. This has caused users to flee to cheap or even free alternatives such as Affinity or DaVinci Resolve.

Uncertainty. There is another striking detail that can critically influence the future of the company. Adobe CEO Shantanu Narayen advertisement who was leaving the company after 18 years at the helm. There is no designated successor and this comes in the middle of that transition to a world full of generative AI solutions. The risk is therefore notable, and whoever takes the reins of the business will have to make very important decisions to not jeopardize the future of an already legendary technology company.

In Xataka | Adobe was not born with Photoshop. It started by solving a huge and inconspicuous problem: printing well